Adidas has announced its decision to sell the remaining inventory of Yeezy sneakers, which were left in limbo after the company terminated its partnership with rapper and designer Kanye West. The first of these products will go on sale at the end of May, and a significant portion of the proceeds will be donated to charities fighting discrimination and hate speech.
The move comes after months of careful consideration as Adidas attempted to offset the financial hit caused by the unsold products. The CEO of Adidas, Bjorn Gulden, stated that this solution respects the design and production of the shoes and will have a positive impact on communities.
Adidas terminated its partnership with Kanye West in October after the rapper made a series of antisemitic remarks, leaving approximately €1.2 billion ($1.3 billion) worth of sneakers in limbo. The German company has spent seven months reviewing options for the stranded shoes and whether it's possible for Adidas to offset some of the financial hit. The company said the action won't have any "immediate impact" on its current financial guidance.
Adidas warned in February that it could have an operating loss of as much as €700 million this year if it's forced to write off all its existing Yeezy inventory. This would have been the company's first operating loss in at least three decades. Gulden previously ruled out options, including the removal of Yeezy branding or trying to recycle all of the shoe materials for use in, say, football field turf. Several non-governmental organizations advised Adidas against incinerating the products.
Last week, Gulden told shareholders that the company was leaning toward selling Yeezy shoes and donating some proceeds toward organizations that help groups who were hurt by Ye's actions. Doing that could help Adidas potentially recoup some of the related costs, which are about €500 million, Gulden said.
Overall, Adidas' decision to sell the remaining Yeezy inventory and donate proceeds to charity demonstrates the company's commitment to social responsibility and taking steps to address the negative impact caused by Kanye West's actions.